A trade war between China and the US: the deadline is Russia

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Торговая война Китая и США: крайней будет Россия

The international monetary Fund (IMF) has criticized the economic policies of Donald trump. According to the head of the organization Christine Lagarde, the us President launched a trade war will reduce global GDP by 0.5%. In particular, it will affect and Russia. The slowdown of China’s economy, the goods which the United States imposed duties, will inevitably lead to a reduction in demand for oil — Russia’s main export. As a result domestic budget will lose billions of rubles.

A trade war Donald trump promised in his election program. Then, many naively believed that it is only populism. However, it turned out that he was not joking. Economic confrontation between China and the United States began at the end of 2017, after the Americans introduced the first restrictive measures against Chinese goods.

However, at the same time, Washington did not calm down. In March 2018 Donald trump has signed a Memorandum against the Chinese “economic aggression”. According to the document, the USA imposes a 25 percent duty on Chinese goods — from consumer electronics to shoes and clothing. Thus, according to the White house, United States punish the Chinese for decades stealing intellectual property of American corporations.

“We are not waging a trade war with China, that war was lost many years ago stupid or incompetent people who represented the United States. We now have a trade deficit of $500 billion a year we lose $300 billion due to theft of intellectual property. We cannot allow these continued”, — said the American President.

In early June, the U.S. imposed duties on Chinese imports in the amount of $50 billion But the Americans do not intend to stay. 20 Jul trump in an interview with CNBC admitted that he is ready to impose protectionist duties on almost all goods imported to the U.S. from China. “I’m ready to reach $500 billion,” said trump about his intentions against Chinese imports.

In turn, Beijing has introduced mirror the tariffs for American goods. However, the response of the Chinese action prompted the Americans to further attack. The United States imposed additional 10% duty on goods from China totaling approximately $200 billion. moreover, on July 16, the Chinese filed a complaint with the world trade organization to the new restrictions from the US.

Meanwhile, as experts warn, the war spares no one, and trademark is no exception. The confrontation between the two largest economies in the world will affect other countries. According to the managing Director of the IMF, Christine Lagarde, duties and tariffs imposed by the United States is influenced by, and in the worst case scenario can lead to a reduction of global GDP by 0.5%.

Sino-us trade war will affect, in particular, and the Russian economy.

“If us-China trade conflict will deepen, inevitably negative consequences will have an impact on Russia,” warns the Ambassador of Russia in China Andrei Denisov.

According to him, Russia closes the top ten trading partners of China. And China in turn for us — of course, the first partner. “And any benefit from a trade war between China and the US is not even comparable to the losses that can occur, for example, demand reduction of Russian imports, due to the economic slowdown of China,” Denisov continued.

The fact that Russia’s trade with China in 2017 reached $84 billion in 2018, it is projected that the figure will be $100 billion. the Chinese continue to invest in the domestic economy. Last year, their investments exceeded $2 billion, an increase of more than 70% in comparison with 2015. “The accumulated investment has reached nearly $13 billion,” — said Denisov.

Of course, Russia could use China-us trade war in their favor. For example, try to increase the supply of food in China. However, it is fraught with the increase of the pressure of Chinese exports on the market. “On goods from China to Russia is critical of a large mass. Last year China generated about 21.5% of total imports. Unfortunately, the program of import substitution in Russia has not worked. Manufacturing industries still depend on imported raw materials and equipment. And China is the first supplier. But a further increase in imports from China is also undesirable. New opportunities for the development of trade relations with China can lead to the fact that China flooded the domestic market with their products,” — said a member of the chamber of Commerce and industry of the Russian Federation Anna Vovk.

In addition, there is a risk that the slowdown of China’s economy under US pressure, will inevitably lead to a reduction in demand for oil. As a consequence, prices for the main goods of the Russian export will go down, and with them domestic Treasury will lose several billion rubles.

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